Expanding in Norwegian electricity market

July 9, 1999, 16:55 CEST

Following its takeover of energy supplier Meganor, Statoil will become one of the biggest marketers of electricity in Norway.

Statoil is to acquire all of the shares in Meganor, which is based in Sandefjord in eastern Norway. Meganor has about 10,000 customers, most of them households. With this takeover, Statoil will have nearly 80,000 electricity customers in Norway.

Project manager in Statoil, Øyvind Ekne, says that the takeover is a natural consequence of Statoil's development and ambition to become a central player in the total Nordic energy market.

"The price we are paying is reasonable compared with other players' recent takeovers. We will continue to look for takeover opportunities or other forms of collaboration with different market players, in addition to continuing our campaign activities," he says.

Harald Steinsholt, main shareholder and managing director of Meganor looks favourably on Statoil becoming the new owner: "Statoil and Meganor both desire to challenge the traditional energy suppliers and they share some common features in relation to customer structure, market strategy and energy trading."

Mr Steinsholt believes that with its size and resources, Statoil will help to make Meganor more competitive while providing economies of scale. This is very important in a market typified by ever increasing competition and pressure on margins.

The agreement between Statoil and Meganor will have no immediate consequences for Meganor's customers or employees. Energy trading and market activities will gradually be coordinated with Statoil, with a view to strengthening the firm's competitive position. Further coordination between the companies will be considered later.